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The court held, “discussion prima facie reveals that (i) money of terror funding was sent from and by Pakistan and its agencies and (ii) that Accused No. 10 was one of the main conduits for flow of this terror funding, and (iii) the Appellant had played an active part in facilitating it”.
The Delhi High Court, on Wednesday, denied the bail application of Naval Kishor Kapoor, an accused in the Kashmir Terror Funding Case. The bench of Justice Navin Chawla and Justice Shalinder Kaur noted that “In the event of his release on bail, there is a likelihood of him fleeing from the clutches of law to evade Prosecution, given the nature and gravity of offences he is visited with”.
The Ministry of Home Affairs passed an order directing the National Investigating Agency (NIA) to investigate allegations against Hafiz Muhammad Saeed and other separatist leaders for conspiring with militants from banned organizations to raise and transfer funds through illegal means, including hawala, to finance terrorism in Kashmir. The investigation uncovered a broader conspiracy involving stone pelting, arson, and destruction of public property. Per NIA, Kapoor allegedly mobilized Rs. 5.57 Crores between 2013 and 2016 through suspicious transactions and withdrew Rs. 39.71 Lakhs after receiving an NIA summons. Charges were framed against him under Section 17 of UAPA and 120B IPC.
Advocate Lakshay Dhamija, representing Kapoor, contended that the Additional Sessions Judge (ASJ) disregarded Supreme Court precedents emphasizing bail for undertrials facing prolonged trials. He argued that the investigation’s findings contradicted the prosecution’s allegations. The NIA failed to establish Kapoor’s role in any conspiracy or financial support to separatist groups.
It was further asserted that the prosecution’s reliance on foreign remittances lacked independent verification of bank records. It was asserted that Kapoor, aged 71, suffered from severe medical conditions and had been in custody for over six years.
Senior Advocate Siddharth Luthra, representing NIA, argued that once charges were framed, Section 43D(5) and (6) of the UA(P) Act required applying the prima facie test. It was contended that bail could not be granted unless Kapoor disproved allegations by cross-examining prosecution witnesses or presenting defense evidence.
The court noted that, despite the stringent conditions imposed under Section 43D(5) of the Unlawful Activities (Prevention) Act (UAPA), the Constitutional Court retained the authority to grant bail in cases where the right to personal liberty under Article 21 of the Indian Constitution was violated. While the UAPA prescribed a special procedure for handling terrorism-related offenses and imposed strict conditions for granting bail, these provisions did not override the fundamental right to a speedy trial.
The court observed that Section 43D(5) restricted judicial discretion in granting bail, as it mandated that an accused should not be released if the court found reasonable grounds, based on the case diary or final report, to believe that the allegations were prima facie true.
“The person accused of offences under UA(P) Act shall not be released on bail if it appears that there are reasonable grounds to believe that the allegations against an accused are prima facie true”, the court noted.
The court further clarified that an accused under the UAPA could not be granted bail if the allegations appeared prima facie true. The conditions became even stricter once charges had been framed. Regarding the twin-prong test, the first aspect required the court to assess whether the criteria for rejecting bail had been met. The second aspect involved the triple test, which examined factors such as flight risk, potential influence on witnesses, and the possibility of evidence tampering.
In the present case, the court found that “the Prosecution has been able to establish prima facie case that the Appellant aided and assisted the Accused No. 10 to bring foreign remittances into India for furthering secessionist and terrorist activities by the Accused No. 10 (Zahoor Ahmad Shah Watali) in the Kashmir valley”.
Given the totality of circumstances, the court found sufficient material on record to indicate the appellant’s involvement in aiding and abetting the transfer of illicit funds from fraudulent companies based in the UAE to separatist groups in Kashmir. Consequently, the court held that there were reasonable grounds to believe the allegations against the appellant were prima facie true, based on the documents collected during the investigation.
The court considered the likelihood of Kapoor absconding to evade prosecution, given the severity of the charges. Furthermore, since the prosecution had yet to examine its protected witnesses, there was a possibility that the appellant might influence them or tamper with evidence. In light of these considerations, the court dismissed the appeal.
The court, on Wednesday, also issued a notice in co-accused Engineer Rashid’s plea seeking permission to join the Parliament Budget Session.
For Petitioner: Advocates Lakshay Dhamija, Mohit Gupta and Sagar RawatFor Respondent: Senior Advocate Sidharth Luthra, Special Public Prosecutor Akshai Malik with Advocates Ayush Agarwal, Karl P. Rustomkhan, Udbhav Sinha, Siddhant Gupta and Khawar SalimCase Title: Naval Kishore Kapoor v NIA (2025:DHC:1604-DB)
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